Weekly Intelligence Brief: August 16 - August 23

AWEA lauds FERC’s rejection of Puget Sound Energy’s tariff proposalThis week's WindEnergyUpdate news brief includes: American Wind Energy Association; Vestas; Iberdrola and Neoenergia; AMSC & Blade Dynamics; Duke Energy; New Jersey's Offshore Wind Economic Development Act; DOE offers fourth loan guarantee solicitation ; IdaCorp; and Sureblades.AWEA lauds FERC’s rejection of Puget Sound Energy’s tariff proposal.  

AWEA lauds FERC’s rejection of Puget Sound Energy’s tariff proposal

AWEA lauds FERC’s rejection of Puget Sound Energy’s tariff proposal

The American Wind Energy Association (AWEA) has applauded the Federal Energy Regulatory Commission’s (FERC) decision to reject a wind tariff proposal from investor-owned utility Puget Sound Energy.

The Association, the national trade association of America’s wind industry, commended FERC’s decision to protect ratepayers and renewable energy sources from what it called a “discriminatory proposed charge”.

“No other generators have these charges assessed, and with this order, we expect utilities will give up their interest in assessing these charges to renewable sources,” said Denise Bode, AWEA CEO.

According to the information available, Puget had argued that the capacity required for following wind generation represents an incremental cost to Puget, and that this incremental cost should be borne by wind generators operating within its balancing authority area (BAA), rather than being shouldered solely by native load.

Puget asserts that its proposed Wind Following Service represents a mechanism that will allow Puget to recover the capacity costs associated with following and balancing the within-hour variations in output from wind generation in Puget’s BAA.  

Last month, the AWEA filed a protest with the FERC regarding the same proposal by Puget Sound Energy. The Association felt that the proposal would impose unfair and excessive grid integration charges on wind plants while failing to charge competing fossil and nuclear-powered power plants for the far larger integration costs they impose on the power system.

Vestas posts Q2 net loss, cuts full year forecast

Danish wind company Vestas cut its full-year outlook after swinging to a second-quarter net loss of €119 million compared with a net profit of €43 million in the same period last year.

The company saw its second quarter revenue dropping 17% from €1,211 million last year to €1,007 million now. 

The company now only expects an EBIT, margin of 5% to 6% and revenue of €6 billion for the full year, down from a previous forecast of an EBIT margin of 10% to 11% and revenue of €7 billion.

The downgrade is the result of late delivery on orders from the U.S., Spain and Germany, which will now take place later in 2010, precluding them from being included as revenue for the current financial year.

According to the company, the decline in revenue and earnings reflects a very low level of activity in the wake of the credit crisis and Vestas’ decision not to adjust its capacity further because of short-term market developments.  

The company cites ongoing expansion of capacity and workforce as key cost drivers during the period. While it expects to recruit nearly 3,000 employees, the company will lay off 300 employees in Denmark.

Separately, Vestas is to move its North American sales and service headquarters into the historic Meier & Frank Depot Building at 1417 NW Everett St. in Portland’s Pearl District.

Construction is expected to begin in October 2010. Vestas plans to occupy the space in early 2012.

Iberdrola and Neoenergia to operate wind farms in Brazil

Iberdrola Renovables and Neoenergia, a Brazilian energy holding company part owned by the Iberdrola Group, have signed a memorandum of understanding to work together to develop and jointly operate onshore and offshore wind farms in Brazil.

The two are considering eventually forming a 50-50 joint venture to commit to bid together on tenders issued by Brazil’s Agencia Nacional de Energía Eléctrica, including the 2010 Reserve Energy and A-3 2010 programmes.

Iberdrola currently has one wind farm in Brazil, the Río do Fogo farm in the state of Río Grande do Norte with an installed capacity of 49 MW.


AMSC acquires stake in Blade Dynamics

American Superconductor (AMSC) has acquired a 25% stake in UK-based Blade Dynamics, a designer and manufacturer of advanced wind turbine blades, for US$8 million in cash.

The Dow Chemical Company, through its Venture Capital group, also made a minority equity investment in Blade Dynamics.

As part of this deal, AMSC will have one seat on the Blade Dynamics Board of Directors.

AMSC founder and CEO Greg Yurek highlighted that the design and manufacturing processes for wind turbine blades have remained fundamentally unchanged for 20 years.

According to Yurek, however, the market is migrating to higher wind turbine power ratings. Onshore wind turbines now exceed 2 MW in many locations, and offshore wind farm developers are increasingly seeking wind turbines with power ratings exceeding 5 MW.

In this context, Yurek says Blade Dynamics has to credit a “game-changing wind turbine blade technology”.

The company’s product development efforts focus on high-performance composite structures that allow rotors to be lighter and improve aerodynamics.

Blade Dynamics also has developed Bladeskyn, a surface material that extends the lifetime and significantly lowers lifecycle costs for wind turbine blades. The company expects that its blade technology will enable the development of rotors that are approximately 200 metres in diameter.

In addition to providing AMSC Windtec licensees with a differentiated blade offering, AMSC expects that its investment could expand the company’s sales opportunities with other wind turbine manufacturers around the world.

Paul Rudling founded Blade Dynamics in 2007 with the purpose of advancing wind turbine rotor technology through design, engineering and processing.


Duke Energy pulls plug on offshore wind project

Power company Duke Energy has decided not to go ahead with its plans to install demonstration wind turbines on the North Carolina coast.

Duke Energy concluded that the fixed costs associated with permitting, design and construction of the small-scale coastal wind demonstration project were no longer economically viable. The Duke Energy team determined the cost of the first turbine to be $88 million, while the second turbine would cost $14 million.

Additional challenges included the need to use modified shallow water construction techniques and a greater than expected potential of disturbing underwater vegetation.

Instead of pursuing a plan to place up to three demonstration wind turbines in the Pamlico Sound, the company and the University of North Carolina at Chapel Hill will refocus their collaboration to study and enable large-scale offshore wind development on the ocean side of the North Carolina coast.

Since the project was announced in September last year, in-depth analysis and engineering have been conducted.


Offshore Wind Economic Development Act signed in New Jersey

New Jersey Governor Chris Christie has signed a bill into law that would offer tax credits to encourage the development of renewable energy resources. The bill establishes an offshore wind renewable energy certificate programme (OREC) and authorises the Economic Development Authority to provide tax credits for qualified wind energy facilities.

The OREC will offer assistance to businesses to construct manufacturing, assemblage and water access facilities to support the development of qualified offshore wind projects.

The bill directs the New Jersey Board of Public Utilities (BPU) to develop an offshore renewable energy certificate programme that calls for a percentage of electricity sold in the state to be from offshore wind energy. This percentage would be developed to support at least 1,100 MW of generation from qualified offshore wind projects. 

Through the legislation, the New Jersey Economic Development Authority (EDA) will provide financial assistance to qualified offshore wind projects and associated equipment manufacturers and assembling facilities.


DOE offers new loan guarantee solicitation for renewable energy

U.S. Department of Energy has announced a new loan guarantee solicitation - its fourth- for renewable energy manufacturing projects.

The Commercial Technology Manufacturing Systems and Components solicitation - which is supported by the American Recovery and Reinvestment Act through Section 1705 of the Loan Guarantee Programme - will support the deployment of renewable energy technologies.

Through this solicitation, the DOE will make available up to $750 million to pay the credit subsidy costs of loan guarantees.

The solicitation will seek applications for projects that manufacture commercial technology renewable energy systems and components, such as wind turbine systems, blades or solar photovoltaic components.

The first Part I deadline is September 30, 2010, and the first Part II deadline is November 30, 2010.  Final part I applications are due November 30, 2010 and final part II applications are due January 31, 2011.


No deal closed on IdaCorp PPA RFP

Boise, Idaho-based IdaCorp’s principal subsidiary, Idaho Power, has said that it will not award a contract for a wind power plant after negotiations failed with developers.

The utility had been hearing proposals on a request for 150 MW of wind-powered generation by 2012.

The company said though the request received "considerable interest" for its Request for Proposals (RFP) and had been diligently negotiating a contract with the clear frontrunner.

However, it was jointly determined that the two parties were ultimately not going to be able to reach a final agreement. Idaho Power recently closed its RFP without awarding a contract.

Idaho Power identified a need for additional wind resources in its 2006 Integrated Resource Plan (IRP). The company develops its IRP every two years using a collaborative public process connecting Idaho Power resource and planning experts with government, public, customer and environmental stakeholders.


Ex-Vestas staff launch new venture

When hundreds of workers were laid off last summer at Vestas' blades factory in the Isle of Wight, the former Vestas employees saw that the glass was half full. Since the lay-offs, former workers have mobilised to form a company called SureBlades, to manufactures blades for micro-turbines.

SureBlades is headed by one of Vestas’ ex-employees Sean McDonagh. Working alongside McDonagh are the former Vestas employees Keith Hunsell and Glynn Milton, and Penny Smout, a former special adviser to Ed Miliband, according to a report filed by The Guardian.

The company is focusing on a new type of blade that will be 100% recyclable. Based on the same industrial estate as the former Vestas factory, the company forecasts it will take on 40 staff within the next two years.